Dissident republicans attached a bomb to a bicycle as part of a trap to kill police in Londonderry, it has been disclosed.

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The device was set up to explode in a follow-up operation after a pipe bomb was found just yards away in a holdall close to the city's main council offices beside the River Foyle, but the timing mechanism malfunctioned and the device failed to go off.

Volunteers belonging to the Foyle search and rescue team found the first device inside the holdall left on railings beside a riverside walkway. They believed the bag belonged to someone who might have jumped into the water after leaving personal possessions behind. A woman looked inside, suspected it was a pipe bomb and alerted police.

Officers who arrived to check the area then spotted the bicycle and feared a second bomb - a tactic used in February last year when dissidents in north Belfast hid a bomb inside a child's bike after luring police into the area. Army explosives officers were later called in, nearby houses evacuated and roads closed to traffic.

Chief Inspector Jon Burrows, the PSNI area commander for Foyle, said: "It was a reckless attack and while it was meant to kill or seriously injure police, there is no doubt any members of the public, or young people, could have been killed."

The riverside path is used by late-night joggers and the city centre was also crowded with university students on Freshers Week. Derry is next year's UK City of Culture and this was the latest in a series of attacks by dissidents in the city. A bank and tourism offices have been among properties bombed. This weekend virtually every hotel room has been booked for social and cultural events.

Mr Burrows said: "Everybody is working hard to generate civic pride, jobs and tourism, in stark contrast to the selfish and cowardly individuals intent on creating negative headlines."

The search and rescue team carries out regular checks on the banks of the Foyle looking out for people threatening suicide. The woman volunteer who was with two others looked into the holdall and spotted a metal pipe inside.

Craig Smith, chairman of the charity, said: "She knew not to reach into it and walked away. It was extremely frightening. All three of those volunteers could have lost their lives or been seriously injured."

Derry's mayor Kevin Campbell said: "People are horrified lives were put at risk. These volunteers are regarded as heroes in Derry. They do sterling work, all in their own time and without pay. Those responsible are a micro-group of disgruntled people who need to move into the 21st century. They need to explain the rationale behind this. They need to stop."